Workday and Zuora announced an integration pact that ties human resources, payroll and financial services with subscription billion and commerce.

The news was announced on the first day of Workday Rising, an annual powwow for Workday customers and partners. Under the pact, Workday's HR and financial applications will integrate seamlessly with Zuora's subscription billing and commerce services.

Both companies are targeting services companies and enterprises with referring revenue streams. The two companies call these companies the hub of the "subscription economy." Workday and Zuora said the integration will allow for flexible pricing to handle subscriptions, add-ons to manage renewals, cancellations and add-ons, metering and a view of bookings, cash and revenue. "The key here is that both of us have a common target: the Oracle and SAP duopoly," said Zuora CEO Tien Tzuo.

As noted previously, Workday is a leading edge ERP company that aims to box in larger rivals such as SAP and Oracle to manufacturing. Given most of the U.S. economy is services based, Workday sees a lot of upside.

Workday has been actively partnering with other on-demand software companies to bridge its HR and financial applications to social and CRM tools to the likes of Salesforce.com. Meanwhile, Workday is plotting an IPO next year and on Monday raised $85 million in financing from T. Rowe Price, Morgan Stanley Investment Management, Janus Capital Group Inc., and Bezos Expeditions. The funding puts a $2 billion valuation on Workday.

For its part, Zuora counts companies like Dell and Ning customers. Tzuo founded the company in 2008 after receiving seed funding from Salesforce.com CEO Marc Benioff. Zuora solves the subscription billing issue for many companies, which are increasingly focused on recurring revenue streams, but lack the systems. For instance, traditional enterprise systems may need separate categories for subscriptions and classify months as SKUs.

In a recent interview, Tzuo described Zuora as the "system of record for subscriptions." The company's infrastructure is built on its own data centers as well as Salesforce.com's Force.com platform.

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